Crypto News

Analyst Issues Solana and Avalanche Warnings, Says Traders Shouldn’t Underestimate Altcoin’s Bear Market

A popular crypto trader is warning digital asset investors about the fate of altcoins as markets take a plunge as the new week begins.
The analyst known as altcoin Sherpa follows up on a May 6 tweet in which he warned that it could be “lights out” for many altcoins if certain price levels are lost.

Now he is sharing with his 175,300 Twitter followers that the competing Layer 1 smart contract platforms Solana (SOL) and Avalanche (AVAX) are both at risk of hitting its bearish targets.

“Bounce or die.”
Source: Altcoin Sherpa/Twitter
At the time of writing, Solana is down 15.71% over the past day and is trading at $64.24, fast approaching altcoin Sherpa’s downside target of $48.56.
Analyst Issues Solana and Avalanche Warnings, Says Traders Shouldn’t Underestimate Altcoin’s Bear Market, Crypto Trading NewsSource: Altcoin Sherpa/Twitter
Avalanche is down 17.25% over the past 24 hours to trade at $42.37, which is very close to altcoin Sherpa’s target of $39.17.

Next, altcoin Sherpa is issuing a broader warning, reminding traders that many altcoins will eventually give back all of their bull market gains.

He highlights several altcoins whose point of control (PoC) could provide at least one layer of support, namely the cross-chain decentralized finance platform Alpha Venture DAO (ALPHA), the cross-chain data network Band Protocol (BAND) and DeFi-Platforms connection (COMP) and Aave (AAVE).

$ALPHA $BAND $COMP $AAVE: Wild to see that many of these other coins go back to their pump origin. The only saving grace for some of these is that the PoC is still lower – these should be decent support areas. Many important lessons can be learned from these charts…

— Altcoin Sherpa (@AltcoinSherpa) May 8, 2022

The pseudonymous trader goes on to say that most crypto projects are “vaporware” whose price increase is due to hype rather than actual utility.

“Most of these projects are vaporware and will drop to 0 when their tokens die. The hype around many of the projects is mainly driven by speculators and fades when interest wanes.”

The Sherpa concludes by invoking the Lindy Effect — a theory that says the longer a non-perishable item exists, the longer it is likely to stay — to explain why Bitcoin (BTC) and Ethereum (ETH) remain the kings of crypto despite countless competing projects that have sprung up over the yearsmarket capitalization.

“At the end of the day, it’s important to recognize why BTC and ETH are so hard to outperform over the long term and the Lindy Effect in crypto seems genuinely real.

Projects will come and go every year and most will still die – even the very good ones like the first four.”
Check the price action

Source: Crypto News Deutsch

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